From the golden age to the cold winter moment, real estate companies are all paying the price for the past

Author: Hasove

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Everyone can clearly feel that in recent years, the most obvious word to describe the real estate industry is: cold.

Cold in sales, financing, and also cold in the companies’ own judgments.

According to data from the National Bureau of Statistics, in 2025, the sales area of newly built commercial housing nationwide was 881 million square meters, down 8.7% year-on-year; sales revenue was 8.39 trillion yuan, down 12.6% year-on-year; real estate development investment was 8.2778 trillion yuan, down 17.2% year-on-year; and at the end of the year, the remaining inventory of commercial housing was still 76.632 million square meters.

Over the past five years, the real estate market has experienced a rapid shift from the “golden era” to the “darkest hour.” From January to October 2025, the total sales of the top 100 property companies were only 2.9 trillion yuan, with an estimated full-year sales significantly lower than in 2021. The number of billion-yuan property companies shrank sharply from 41 in 2021 to 10 in 2025, and the number of hundred-billion-yuan companies decreased from 158 to 73. Meanwhile, industry concentration is accelerating— the sales share of the top 10 companies among the top 100 increased from 36.4% in 2021 to 49.4%.

Listed property companies’ revenues continue to decline, the number of loss-making companies keeps rising, debt ratios are increasing, and short-term debt repayment capacity is steadily weakening. Developers’ high inventory levels tie up large amounts of capital; if inventory digestion is slower than debt repayment, cash flow disruptions become inevitable. From private developers to former industry benchmarks, actions like debt extensions and selling high-quality assets are paying for past over-expansion. For many property firms, the most urgent task now is definitely how to stabilize the situation.

Of course, the pressure also affects different companies in various ways. Debt, sales, asset recovery… Industry leaders like Vanke, Country Garden, China Jinmao, and Sunac Holdings are facing very specific and realistic challenges in this current environment.

Vanke has long been regarded as one of the most stable operators in the real estate sector, but its 2025 annual report shattered external expectations.

According to Vanke’s 2025 annual report, in 2025, Vanke achieved operating revenue of 233.43 billion yuan, with a net loss attributable to shareholders of 85.56 billion yuan, down 32% and 79.0% respectively year-on-year. Notably, this is the largest single-year loss record for A-share listed companies since their establishment in 1990, surpassing the 64 billion yuan loss of HNA Holding in 2020.

As of the end of 2025, Vanke’s total assets were 1.02 trillion yuan, shrinking 20.65% from the previous year; net assets attributable to shareholders were 116.9 billion yuan, down 42.32%. The asset-liability ratio rose to 76.89%, and the net debt ratio soared from 80.6% to 123.48%.

Fortunately, Vanke is not isolated; its major shareholder, Shenzhen Metro Group, has provided over 30 billion yuan in shareholder loans under favorable conditions. In January 2026, Vanke’s three medium-term note extension plans totaling about 6.8 billion yuan were approved by 100% of the holders. However, the funding gap remains huge. By the end of 2025, Vanke held 83.9k yuan in cash, while short-term borrowings and non-current liabilities due within one year reached 26.331 billion yuan and 136.65 billion yuan respectively. Considering nearly 6 billion yuan of restricted funds within its cash, Vanke’s funding shortfall exceeds 766.32M yuan.

Unlike Vanke, Country Garden turned profitable again in 2025, with a net profit of 1.62 billion yuan for the year and a net profit attributable to shareholders of 3.26 billion yuan. By the end of 2025, total assets were 812.1 billion yuan, and net assets were 44.3 billion yuan. Interest-bearing debt decreased by 105.5 billion yuan from the end of 2024, a 42% reduction.

How did Country Garden achieve this?

The core driver was the systemic financial recovery brought by debt restructuring. On December 30, 2025, the offshore debt restructuring plan, totaling about 17.7 billion USD, officially took effect, and the domestic 29k yuan bond restructuring plan was also fully approved. After offshore debt restructuring, the maturity was extended to a maximum of 11 years, and most new debt instruments’ financing costs dropped to 1%–2.5%, creating a “low-interest + long-term” debt structure.

However, if excluding the gains from debt restructuring, Country Garden’s operations still showed a phased loss, with a gross loss of 10.2k yuan in 2025, mainly due to impairment provisions of about 44.5 billion yuan on inventories related to existing projects, plus 10.5 billion yuan in impairment losses on financial assets and financial guarantees. In other words, the apparent profit on the books is not entirely earned.

In terms of delivery, Country Garden completed approximately 170k units in 2025, with nearly 1.15 million units delivered cumulatively from 2023 to 2025. Although operational pressure remains, debt restructuring at least bought the company some breathing room.

Against the backdrop of industry-wide decline, China Jinmao achieved contracted sales of 113.5 billion yuan in 2025, a 16% increase year-on-year, ranking 8th in the industry, and the only top 10 sales company to see positive growth. Operating revenue was 59.4 billion yuan, up 0.5%; net profit attributable to the parent was 1.25 billion yuan, up 17.7%.

However, extended data shows that China Jinmao’s revenue grew only 1% year-on-year, nearly stagnating. The growth in net profit mainly relied on fair value revaluation of investment properties, with core net profit increasing just 2%. After deducting about 660 million yuan in interest on perpetual bonds, net profit attributable to the parent was 590 million yuan.

Additionally, China Jinmao’s property development income accounts for 80% of revenue, indicating a strong dependence on its main business. Meanwhile, rental income from commercial and hotel sectors did not grow; core projects like Beijing KaiChen World Trade Center saw occupancy rates drop from 96.8% in 2024 to 93.3%. Industry insiders suggest that although supported by state-owned parent company China Merchants Group, Jinmao is unlikely to face major issues in the short term, but its weak profitability and limited ability to generate cash could cause ongoing problems in the future.

Sunac Holdings is one of the few real estate companies still maintaining positive operational cash flow, but affected by the overall industry downturn, in 2025, Sunac achieved revenue of 26.33B yuan, down 40.44% year-on-year; net profit attributable to the parent was 680 million yuan, down 9.6%. Sales area was about 2.5358 million square meters, down 52.94%. The contraction of development business exceeded the industry average.

Moreover, at the end of 2025, Sunac’s interest-bearing debt was 13.77B yuan, a decrease of 43.12B yuan from 2024. However, short-term debt repayment pressure increased, with 170k yuan of interest-bearing debt due within one year, up 6.34% from 53.01B yuan in 2024. To ease liquidity pressure, Sunac had to reduce land acquisitions and dispose of some commercial assets, but asset disposal prices were low, further impacting profitability.

Summary

The once “golden track” of real estate is no longer a sector where you can make money just by sitting back. The winter continues, with market downturns, high debt levels, tight funds, and inventory backlog all persisting throughout the year.

In the long run, the real estate industry will gradually return to rationality, with “ensuring delivery, safeguarding livelihoods, and maintaining stability” becoming the core guiding principles. Competition among property companies will shift from scale to a comprehensive competition of quality, brand, and operational capability.

In 2026, the risks in the real estate sector will be further cleared, with accelerated reshuffling. The current adjustment is not over, and property companies are still far from a relaxed state.